SIMEC ZEN Energy Chairman Sanjeev Gupta has revealed a historic deal to provide low-cost solar power to five companies in South Australia, promising to drive down their power prices by as much as 50 per cent.
A consortium formed by the South Australian Chamber of Mines and Energy (SACOME) awarded the eight-year supply contract to SIMEC ZEN Energy on Friday.
The contract will help fast track the construction of the 220MW Cultana solar farm near Whyalla and support GFG’s plans to set up a copper smelter in the steel city.
The deal represents a successful outcome for the bulk-buying consortium masterminded by SACOME for its members in 2016, given the green light by the Australian Competition and Consumer Commission’s (ACCC) in the face of soaring energy costs and supply reliability concerns in the state.
The buyers group is made up of 20 businesses, five of which have signed up for the eight-year deal, including leading miner Hillgrove Resources and copper mien and carbonate produce Adchem.
The others are retailer Foodland, storage and handling group Viterra and the Central Irrigation Trust, the largest irrigation infrastructure operator in South Australia.
SIMEC ZEN Energy Chairman Sanjeev Gupta said ‘Although this initial contract may not seem overly significant in its own right, it is a hugely important step that marks the turning of the tide.’
“It’s not only a disruption to the market by slashing prices and for the first time providing a long-term pricing mechanism to all sizes of buyers, it’s also proving that renewables are the future of energy in South Australia.
“It firmly places SIMEC ZEN as the new trailblazing retailer, bringing sustainable and competitive energy once again to South Australia.
“This capacity will be a mix of generation assets suited to the new energy landscape, such as the Cultana Solar Power Station and our other projects in the Upper Spencer Gulf.”
South Australia has the most volatile and expensive wholesale electricity market in Australia and is one of the most expensive electricity markets in the developed world.
This agreement brings electricity prices down significantly for members of the SACOME group. This is a landmark deal and is expected to inspire a host of similar initiatives across the country.
SACOME CEO Rebecca Knol said, “this collaboration has delivered affordable power to some of South Australia’s largest energy users and underpinned the development of new supply.’
“Following the ACCC’s green light in May 2017, SACOME’s flagship joint-purchasing electricity group banded together to leverage their strength in numbers and bring down electricity prices for their businesses.
“The group’s approach to this complex commercial negotiation in a fast-changing electricity environment has been inspirational.
“The outcome is a credit to the stamina and commitment of our participating members who represent a diverse slice of South Australian business.”